80 FR 15046 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 12.14, Front Running of Block Transactions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 54 (March 20, 2015)
Federal Register Volume 80, Issue 54 (March 20, 2015)
| Page Range | 15046-15048 | |
| FR Document | 2015-06361 |
[Federal Register Volume 80, Number 54 (Friday, March 20, 2015)] [Notices] [Pages 15046-15048] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-06361] [[Page 15046]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74513; File No. SR-BATS-2015-16] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 12.14, Front Running of Block Transactions March 16, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on March 3, 2015, BATS Exchange, Inc. (the ``Exchange'' or ``BATS'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to adopt new Rule 12.14, Front Running of Block Transactions, to conform with the rules of the Financial Industry Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement between the Exchange and FINRA pursuant to Rule 17d-2 under the Act.\3\ The proposed rule change is identical to proposed rule changes submitted by the EDGX Exchange, Inc. (``EDGX'') and the EDGA Exchange, Inc. (``EDGA'') that were published by the Commission.\4\ --------------------------------------------------------------------------- \3\ 17 CFR 240.17d-2. \4\ See Securities Exchange Act Release Nos. 70625 (October 8, 2013), 78 FR 62842 (October 22, 2013) (SR-EDGA-2013-29) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend EDGA Rules 3.22, 13.3, and Adopt Rule 12.14, Front Running of Block Transactions to Conform With the Rules of Other Self-Regulatory Organizations); and 70626 (October 8, 2013), 78 FR 62855 (October 22, 2013) (SR-EDGX-2013-36) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend EDGA [sic] Rules 3.22, 13.3, and Adopt Rule 12.14, Front Running of Block Transactions to Conform With the Rules of Other Self-Regulatory Organizations). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt new Rule 12.14, Front Running of Block Transactions, which would require that Members and persons associated with a Member shall comply with FINRA Rule 5270 as if such Rule were part of the Exchange's Rules.\5\ FINRA Rule 5270 states that no FINRA member or person associated with a member shall cause to be executed an order to buy or sell a security or a related financial instrument \6\ when such member or person associated with a member has material, non-public market information concerning an imminent block transaction \7\ in that security, a related financial instrument or a security underlying the related financial instrument. --------------------------------------------------------------------------- \5\ The proposed rule text is substantially the same as IM-2110- 3 of the Nasdaq Stock Market LLC (``Nasdaq''), which has been approved by the Commission. See Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (order approving Nasdaq's application for registration as a national securities exchange). See also Securities Exchange Act Release No. 58069 (June 30, 2008), 73 FR 39360 (July 9, 2008) (SR-Nasdaq-2008- 054) (Notice of Filing and Immediate Effectiveness). Securities Exchange Act Release No. 34-67774 (September 4, 2012), 77 FR 55519 (September 12 [sic], 2012) (Approval Order). See also supra note 4. \6\ FINRA Rule 5270 defines the term ``related financial instrument'' as ``any option, derivative, security-based swap, or other financial instrument overlying a security, the value of which is materially related to, or otherwise acts as a substitute for, such security, as well as any contract that is the functional economic equivalent of a position in such security.'' \7\ Under FINRA Rule 5270, a transaction involving 10,000 shares or more of a security, an underlying security, or a related financial instrument overlying such number of shares, is generally deemed to be a block transaction, although a transaction of fewer than 10,000 shares could be considered a block transaction. A block transaction that has been agreed upon does not lose its identity as such by arranging for partial executions of the full transaction in portions which themselves are not of block size if the execution of the full transaction may have a material impact on the market. --------------------------------------------------------------------------- FINRA Rule 5270 includes exceptions to the general prohibitions of the rule where a member can demonstrate that a transaction is unrelated to the material, non-public market information received in connection with the customer order. The Supplementary Material to FINRA Rule 5270 includes an illustrative list of potentially permitted transactions as examples of transactions that, depending upon the circumstances, may be unrelated to the customer block order. These types of transactions may include: Where the member has information barriers established to prevent internal disclosure of such information; actions [sic] in the same security related to a prior customer order in that security; transactions to correct bona fide errors; or transactions to offset odd-lot orders. In addition, Rule 5270 does not preclude transactions undertaken for the purpose of fulfilling, or facilitating the execution of, the customer block order. However, when engaging in trading activity that could affect the market for the security that is the subject of the customer block order, the member must minimize any potential disadvantage or harm in the execution of the customer's order, must not place the member's financial interests ahead of those of its customer, and must obtain the customer's consent to such trading activity. A member may obtain its customers' consent through affirmative written consent or through the use of a negative consent letter. The negative consent letter must clearly disclose to the customer the terms and conditions for handling the customer's orders; if the customer does not object, then the member may reasonably conclude that the customer has consented and the member may rely on such letter for all or a portion of the customer's orders. In addition, a member may provide clear and comprehensive oral disclosure to and obtain consent from the customer on an order-by-order basis, provided that the member documents who provided such consent and such consent evidences the customer's understanding of the terms and conditions for handling the customer's order. The Exchange also proposes to state in new Rule 12.14 that although the prohibitions in Rule 5270 are limited to imminent block transactions, the front running of other types of orders that place the financial interests of the Member or persons associated with a Member ahead of those of its customer or the misuse of knowledge of an imminent customer order may violate [[Page 15047]] other Exchange rules, including Rule 3.1 and Rule 12.6, or provisions of the federal securities laws. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,\8\ which requires, among other things, that the Exchange's rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. By incorporating FINRA Rule 5270, new Rule 12.14 prohibits front running trading activity that the Exchange believes is inconsistent with just and equitable principles of trade while also ensuring that Members may continue to engage in transactions that do not present the risk of abusive trading practices that the rule is intended to prevent. The Exchange believes that Rule 12.14 would enhance the protection of customer orders by addressing various types of abusive trading that may be intended to take advantage of customer orders. As previously noted, the proposed rule text is substantially similar to Nasdaq's IM-2110-3, which has been approved by the Commission,\9\ as well as EDGA Rule 12.14 and EDGX Rule 12.14, which have been previously published by the Commission.\10\ By adopting Rule 12.14, the Exchange believes that imminent customer block orders would be better protected and that the proposed rule change will prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, and better protect investors and the public interest. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b)(5). \9\ See Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (order approving Nasdaq's application for registration as a national securities exchange). See also Securities Exchange Act Release No. 58069 (June 30, 2008), 73 FR 39360 (July 9, 2008) (SR-Nasdaq-2008-054) (Notice of Filing and Immediate Effectiveness). Securities Exchange Act Release No. 34- 67774 (September 4, 2012), 77 FR 55519 (September 12, 2012) (Approval Order). \10\ See supra note 4. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address any competitive issues but rather is designed to enable the Exchange to better protect imminent customer block orders, as well as to provide greater harmonization among Exchange and FINRA rules, resulting in less burdensome and more efficient regulatory compliance for common members. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b- 4(f)(6)(iii) thereunder.\14\ --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A)(iii). \12\ 17 CFR 240.19b-4(f)(6). \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative immediately upon filing. The Exchange argues that waiver of the operative delay would enable it to enhance its rules protecting customer orders in a timely manner by explicitly prohibiting Members from trading ahead of block transaction in violation of proposed Rule 12.14 during what would be the operative delay period.\17\ The Exchange also represents that waiver of the operative delay would allow it to promptly incorporate Rule 12.14 into the 17d-2 Agreement, further reducing duplicative regulation of Exchange Members that are also members of FINRA. In addition, the Exchange states that waiving the operative delay would provide greater harmonization among Exchange, EDGA, EDGX, and FINRA rules, resulting in less burdensome and more efficient regulatory compliance for Members and facilitating FINRA's performance of its regulatory functions under the 17d-2 Agreement in a timelier manner. Based on the foregoing, the Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.\18\ --------------------------------------------------------------------------- \15\ 17 CFR 240.19b-4(f)(6). \16\ 17 CFR 240.19b-4(f)(6)(iii). \17\ The Exchange also represents that it has already informed its Members that it will implement the proposed rule change on March 23, 2015, a date that was determined based upon the effective date of a prior version of this filing. See BZX and BYX Regulatory Circular 15-003, Front Running of Block Transactions, dated February 24, 2015. \18\ For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-BATS-2015-16 on the subject line. [[Page 15048]] Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BATS-2015-16. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BATS-2015-16, and should be submitted on or before April 10, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-06361 Filed 3-19-15; 8:45 am] BILLING CODE 8011-01-P
![15046 Federal Register / Vol. 80, No. 54 / Friday, March 20, 2015 / Notices
SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s underlying the related financial
COMMISSION Statement of the Purpose of, and instrument.
Statutory Basis for, the Proposed Rule FINRA Rule 5270 includes exceptions
Change to the general prohibitions of the rule
[Release No. 34–74513; File No. SR–BATS–
In its filing with the Commission, the where a member can demonstrate that a
2015–16]
Exchange included statements transaction is unrelated to the material,
Self-Regulatory Organizations; BATS non-public market information received
concerning the purpose of and basis for
Exchange, Inc.; Notice of Filing and in connection with the customer order.
the proposed rule change and discussed
The Supplementary Material to FINRA
Immediate Effectiveness of a Proposed any comments it received on the
Rule 5270 includes an illustrative list of
Rule Change To Adopt Rule 12.14, proposed rule change. The text of these
potentially permitted transactions as
Front Running of Block Transactions statements may be examined at the
examples of transactions that,
places specified in Item IV below. The
March 16, 2015. depending upon the circumstances, may
Exchange has prepared summaries, set
be unrelated to the customer block
Pursuant to Section 19(b)(1) of the forth in Sections A, B, and C below, of
order. These types of transactions may
Securities Exchange Act of 1934 (the the most significant parts of such
include: Where the member has
‘‘Act’’),1 and Rule 19b–4 thereunder,2 statements. information barriers established to
notice is hereby given that on March 3, A. Self-Regulatory Organization’s prevent internal disclosure of such
2015, BATS Exchange, Inc. (the Statement of the Purpose of, and information; actions [sic] in the same
‘‘Exchange’’ or ‘‘BATS’’) filed with the Statutory Basis for, the Proposed Rule security related to a prior customer
Securities and Exchange Commission Change order in that security; transactions to
(‘‘Commission’’) a proposed rule change correct bona fide errors; or transactions
1. Purpose to offset odd-lot orders.
as described in Items I and II below,
which Items have been prepared by the The Exchange proposes to adopt new In addition, Rule 5270 does not
Exchange. The Commission is Rule 12.14, Front Running of Block preclude transactions undertaken for the
publishing this notice to solicit Transactions, which would require that purpose of fulfilling, or facilitating the
comments on the proposed rule change Members and persons associated with a execution of, the customer block order.
from interested persons. Member shall comply with FINRA Rule However, when engaging in trading
5270 as if such Rule were part of the activity that could affect the market for
I. Self-Regulatory Organization’s Exchange’s Rules.5 FINRA Rule 5270 the security that is the subject of the
Statement of the Terms of Substance of states that no FINRA member or person customer block order, the member must
the Proposed Rule Change associated with a member shall cause to minimize any potential disadvantage or
be executed an order to buy or sell a harm in the execution of the customer’s
The Exchange filed a proposal to security or a related financial order, must not place the member’s
adopt new Rule 12.14, Front Running of instrument 6 when such member or financial interests ahead of those of its
Block Transactions, to conform with the person associated with a member has customer, and must obtain the
rules of the Financial Industry material, non-public market information customer’s consent to such trading
Regulatory Authority, Inc. (‘‘FINRA’’) concerning an imminent block activity. A member may obtain its
for purposes of an agreement between transaction 7 in that security, a related customers’ consent through affirmative
the Exchange and FINRA pursuant to financial instrument or a security written consent or through the use of a
Rule 17d–2 under the Act.3 The negative consent letter. The negative
proposed rule change is identical to 5 The proposed rule text is substantially the same consent letter must clearly disclose to
proposed rule changes submitted by the as IM–2110–3 of the Nasdaq Stock Market LLC the customer the terms and conditions
(‘‘Nasdaq’’), which has been approved by the for handling the customer’s orders; if
EDGX Exchange, Inc. (‘‘EDGX’’) and the Commission. See Securities Exchange Act Release
EDGA Exchange, Inc. (‘‘EDGA’’) that No. 53128 (January 13, 2006), 71 FR 3550 (January
the customer does not object, then the
23, 2006) (order approving Nasdaq’s application for member may reasonably conclude that
were published by the Commission.4
registration as a national securities exchange). See the customer has consented and the
The text of the proposed rule change also Securities Exchange Act Release No. 58069 member may rely on such letter for all
is available at the Exchange’s Web site (June 30, 2008), 73 FR 39360 (July 9, 2008) (SR–
Nasdaq–2008–054) (Notice of Filing and Immediate
or a portion of the customer’s orders. In
at www.batstrading.com, at the Effectiveness). Securities Exchange Act Release No. addition, a member may provide clear
principal office of the Exchange, and at 34–67774 (September 4, 2012), 77 FR 55519 and comprehensive oral disclosure to
the Commission’s Public Reference (September 12 [sic], 2012) (Approval Order). See and obtain consent from the customer
also supra note 4. on an order-by-order basis, provided
Room. 6 FINRA Rule 5270 defines the term ‘‘related
financial instrument’’ as ‘‘any option, derivative,
that the member documents who
1 15 U.S.C. 78s(b)(1). security-based swap, or other financial instrument provided such consent and such
2 17 CFR 240.19b–4. overlying a security, the value of which is consent evidences the customer’s
3 17 CFR 240.17d–2. materially related to, or otherwise acts as a understanding of the terms and
substitute for, such security, as well as any contract
4 See Securities Exchange Act Release Nos. 70625
that is the functional economic equivalent of a
conditions for handling the customer’s
(October 8, 2013), 78 FR 62842 (October 22, 2013) position in such security.’’ order.
(SR–EDGA–2013–29) (Notice of Filing and 7 Under FINRA Rule 5270, a transaction involving The Exchange also proposes to state
Immediate Effectiveness of Proposed Rule Change
10,000 shares or more of a security, an underlying in new Rule 12.14 that although the
to Amend EDGA Rules 3.22, 13.3, and Adopt Rule security, or a related financial instrument overlying
mstockstill on DSK4VPTVN1PROD with NOTICES
12.14, Front Running of Block Transactions to prohibitions in Rule 5270 are limited to
such number of shares, is generally deemed to be
Conform With the Rules of Other Self-Regulatory a block transaction, although a transaction of fewer
imminent block transactions, the front
Organizations); and 70626 (October 8, 2013), 78 FR than 10,000 shares could be considered a block running of other types of orders that
62855 (October 22, 2013) (SR–EDGX–2013–36) transaction. A block transaction that has been place the financial interests of the
(Notice of Filing and Immediate Effectiveness of agreed upon does not lose its identity as such by Member or persons associated with a
Proposed Rule Change to Amend EDGA [sic] Rules arranging for partial executions of the full
3.22, 13.3, and Adopt Rule 12.14, Front Running of transaction in portions which themselves are not of
Member ahead of those of its customer
Block Transactions to Conform With the Rules of block size if the execution of the full transaction or the misuse of knowledge of an
Other Self-Regulatory Organizations). may have a material impact on the market. imminent customer order may violate
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![15048 Federal Register / Vol. 80, No. 54 / Friday, March 20, 2015 / Notices
Paper Comments SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and
• Send paper comments in triplicate Statutory Basis for, the Proposed Rule
to Secretary, Securities and Exchange Change
[Release No. 34–74514; File No. SR–BYX–
Commission, 100 F Street NE.,
2015–13] In its filing with the Commission, the
Washington, DC 20549–1090.
Exchange included statements
All submissions should refer to File Self-Regulatory Organizations; BATS concerning the purpose of and basis for
Number SR–BATS–2015–16. This file Y-Exchange, Inc.; Notice of Filing and the proposed rule change and discussed
number should be included on the Immediate Effectiveness of a Proposed any comments it received on the
subject line if email is used. To help the Rule Change To Adopt Rule 12.14, proposed rule change. The text of these
Commission process and review your Front Running of Block Transactions statements may be examined at the
comments more efficiently, please use places specified in Item IV below. The
March 16, 2015. Exchange has prepared summaries, set
only one method. The Commission will
post all comments on the Commission’s Pursuant to Section 19(b)(1) of the forth in Sections A, B, and C below, of
Internet Web site (http://www.sec.gov/ Securities Exchange Act of 1934 (the the most significant parts of such
rules/sro.shtml). Copies of the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 statements.
submission, all subsequent notice is hereby given that on March 3, A. Self-Regulatory Organization’s
amendments, all written statements 2015, BATS Y-Exchange, Inc. (the Statement of the Purpose of, and
with respect to the proposed rule ‘‘Exchange’’ or ‘‘BYX’’) filed with the Statutory Basis for, the Proposed Rule
change that are filed with the Securities and Exchange Commission Change
Commission, and all written (‘‘Commission’’) a proposed rule change
1. Purpose
communications relating to the as described in Items I and II below,
proposed rule change between the which Items have been prepared by the The Exchange proposes to adopt new
Commission and any person, other than Exchange. The Commission is Rule 12.14, Front Running of Block
those that may be withheld from the publishing this notice to solicit Transactions, which would require that
comments on the proposed rule change Members and persons associated with a
public in accordance with the
from interested persons. Member shall comply with FINRA Rule
provisions of 5 U.S.C. 552, will be
5270 as if such Rule were part of the
available for Web site viewing and I. Self-Regulatory Organization’s Exchange’s Rules.5 FINRA Rule 5270
printing in the Commission’s Public Statement of the Terms of Substance of states that no FINRA member or person
Reference Room, 100 F Street NE., the Proposed Rule Change associated with a member shall cause to
Washington, DC 20549 on official be executed an order to buy or sell a
business days between the hours of The Exchange filed a proposal to security or a related financial
10:00 a.m. and 3:00 p.m. Copies of such adopt new Rule 12.14, Front Running of instrument 6 when such member or
filing also will be available for Block Transactions, to conform with the person associated with a member has
inspection and copying at the principal rules of the Financial Industry material, non-public market information
offices of the Exchange. All comments Regulatory Authority, Inc. (‘‘FINRA’’) concerning an imminent block
received will be posted without change; for purposes of an agreement between transaction 7 in that security, a related
the Commission does not edit personal the Exchange and FINRA pursuant to financial instrument or a security
identifying information from Rule 17d–2 under the Act.3 The
submissions. You should submit only proposed rule change is identical to 5 The proposed rule text is substantially the same
information that you wish to make as IM–2110–3 of the Nasdaq Stock Market LLC
proposed rule changes submitted by the (‘‘Nasdaq’’), which has been approved by the
available publicly. All submissions EDGX Exchange, Inc. (‘‘EDGX’’) and the Commission. See Securities Exchange Act Release
should refer to File Number SR–BATS– EDGA Exchange, Inc. (‘‘EDGA’’) that No. 53128 (January 13, 2006), 71 FR 3550 (January
2015–16, and should be submitted on or were published by the Commission.4 23, 2006) (order approving Nasdaq’s application for
registration as a national securities exchange). See
before April 10, 2015. The text of the proposed rule change also Securities Exchange Act Release No. 58069
For the Commission, by the Division of is available at the Exchange’s Web site (June 30, 2008), 73 FR 39360 (July 9, 2008) (SR–
Nasdaq–2008–054) (Notice of Filing and Immediate
Trading and Markets, pursuant to delegated at www.batstrading.com, at the Effectiveness). Securities Exchange Act Release No.
authority.19 principal office of the Exchange, and at 34–67774 (September 4, 2012), 77 FR 55519
Brent J. Fields, the Commission’s Public Reference (September 12 [sic], 2012) (Approval Order). See
also supra note 4.
Secretary. Room. 6 FINRA Rule 5270 defines the term ‘‘related
[FR Doc. 2015–06361 Filed 3–19–15; 8:45 am] financial instrument’’ as ‘‘any option, derivative,
1 15 U.S.C. 78s(b)(1). security-based swap, or other financial instrument
BILLING CODE 8011–01–P
2 17 CFR 240.19b–4. overlying a security, the value of which is
3 17 CFR 240.17d–2. materially related to, or otherwise acts as a
4 See Securities Exchange Act Release Nos. 70625
substitute for, such security, as well as any contract
that is the functional economic equivalent of a
(October 8, 2013), 78 FR 62842 (October 22, 2013) position in such security.’’
(SR–EDGA–2013–29) (Notice of Filing and 7 Under FINRA Rule 5270, a transaction involving
Immediate Effectiveness of Proposed Rule Change
10,000 shares or more of a security, an underlying
to Amend EDGA Rules 3.22, 13.3, and Adopt Rule security, or a related financial instrument overlying
mstockstill on DSK4VPTVN1PROD with NOTICES
12.14, Front Running of Block Transactions to such number of shares, is generally deemed to be
Conform With the Rules of Other Self-Regulatory a block transaction, although a transaction of fewer
Organizations); and 70626 (October 8, 2013), 78 FR than 10,000 shares could be considered a block
62855 (October 22, 2013) (SR–EDGX–2013–36) transaction. A block transaction that has been
(Notice of Filing and Immediate Effectiveness of agreed upon does not lose its identity as such by
Proposed Rule Change to Amend EDGA [sic] Rules arranging for partial executions of the full
3.22, 13.3, and Adopt Rule 12.14, Front Running of transaction in portions which themselves are not of
Block Transactions to Conform With the Rules of block size if the execution of the full transaction
19 17 CFR 200.30–3(a)(12). Other Self-Regulatory Organizations). may have a material impact on the market.
VerDate Sep<11>2014 20:14 Mar 19, 2015 Jkt 235001 PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 E:\FR\FM\20MRN1.SGM 20MRN1](https://thefederalregister.org/doc/80_FR_15100/page/3.svg)
Document Created: 2015-12-18 11:34:17
Document Modified: 2015-12-18 11:34:17
| Category | Regulatory Information | |
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| FR Citation | 80 FR 15046 |
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